What the WCC CEO told Councillors

I’ve been sent a transcript of what the Chief Executive of Wellington City Council told Councillors before they voted to impose an extra $2.4 million of costs on ratepayers by mandating security contractors must pay their staff the so called living wage. It is unbelievable that a majority of them ignored this advice.

It seems that if the Council decision is found to be unlawful, the Local Government Act allows for Councillors to be deemed to have personal liability for the costs of the unlawful decision, if they were warned it was unlawful. This could come back to bite them in a very costly way.

Here’s the statement:

Your Worship and Councillors it is a privilege to be your CEO. This is a very special City. A CEO’s job has many highlights. One of the most enjoyable is visiting staff who deliver on the front line. In recent times I have visited the Botanic Gardens, Kilbirnie Sports Centre, the Policy and Engagement Team, City Archives and the Highways team working on the various schemes in Johnsonville. My job has a few lowlights too. You can’t have everything! One of my more difficult jobs is, very occasionally, having to tell you not what you want to hear but what you need to hear. This is one of those moments.

I have consistently advised against adopting the Living Wage. Please do not take my discomfort as a lack of concern over low pay. Last year two lifeguards in Kilbirnie Sports Centre valiantly tried to save the life of an elderly swimmer who had a heart attack in the water. Sadly the lady died but the actions of the lifeguards were praised by the coroner. They did everything they possibly could have done to save her life but their actions were in vain. Lifeguards have a vital public safety role and sometimes they make the difference between life and death. These are really important jobs – arguably more important than mine or yours. It did not make me feel proud to discover that those two lifeguards were on the minimum wage. That was not our finest moment as a City Council.

You know officers had reservations about the Living Wage. I will not go through these here as they have been well aired. Notwithstanding these reservations your officers found a way to adopt the Living Wage first for Council staff and now for CCO staff. Our solution was to apply the Living Wage for workforce reasons only based on training and enhanced productivity. I have to be clear it was for workforce reasons not to promote social equality. The latter would be unlawful.

This is crucial. Applying a “living wage” to your own staff can be justified as a legal use of ratepayer money, as it can have benefits for your own workforce. But applying it to outside contractors does not have the same rationale.

We are the only council in New Zealand to adopt the Living Wage. And we are way ahead of any other public sector organisation in the country. It makes me a little nervous being at the ‘bleeding edge’ and so far ahead of everybody else. You too should be nervous. As officers we have been clear and straight with you. But we have also respected your right to make a decision and direct us. And we have been flexible and creative in finding a solution that has a low risk of legal challenge.

I hope that our ‘can do’ approach will be taken into account when you consider our advice on applying the Living Wage to the security contract. I know that many of you will not like this advice. Just as I respect your right to make a decision and direct me, you need to acknowledge my right and duty to give you professional advice without fear or favour.

I have consistently said that applying the Living Wage to contractors would be difficult. Each case will be different due to the nature of the work, the marketplace and our ability to bring work in-house or not. I decided to refer decisions on applying the Living Wage to individual contracts back to Council. This is because you are directing me to implement something I have major reservations about. It is therefore right and proper that you take full responsibility for your decisions.

That responsibility may include personal liability if found to be unlawful.

My decision to make the legal advice public was not taken lightly. It is an unusual step but has happened before. The advice is very clear cut – there’s a high risk of losing a legal challenge.

A high risk. And they went ahead.

This is the complete opposite of adopting the Living Wage for Council and CCO staff. Moreover, I am aware that there is contrary advice in the public domain that may lead you to conclude that the risks are lower than they really are. Unlike the advice in the public domain the legal advice to the Council is very specific. It is not about contractors generically or generalised savings, costs and productivity levels. It is about the WCC security tender in 2015 in New Zealand based on the actual prices and service levels offered by the preferred supplier.

So they have specific advice about this specific contract and that it is highly likely to be illegal.

But there is another, more important reason for making the advice public. If in your wisdom you decide to direct me to implement the Living Wage for the security contract you are putting me in a very difficult position as CEO. In essence, you are asking me to implement something that is potentially unlawful.

No Governors should ever do that.

Moreover, we can expect someone to seek a judicial review should you adopt the Living Wage for the security contract. I would never, ever direct any of my employees to implement something that I know to be potentially unlawful. I have a duty as a good employer and I take it very seriously. You have that same duty towards me. It is not a good look to direct me in the face of such clear and unequivocal advice.

Basically the Council are instructing a staffer to do something that is probably unlawful. No good employer should do that.

This changes the issue away from the Living Wage to your duties as a good employer to me. Given the seriousness of this I have taken separate legal advice about my position with another legal firm. As CEO I take my responsibilities to operate within a safe environment and the law seriously. Like you I am bound by the Local Government Act and my contract of employment with you states that I have to act within the law. The strong legal opinion before you is merely an opinion. It is not the law. A sensible compromise is to wait for the outcome of the judicial review before implementing a direction should that be forthcoming or directing me to the High Court to secure a declaratory judgement. An implementation date of 1 July 2016 would help to give me the time to clear the legal hurdles. This is something I have discussed with the Mayor. The legal advice to me confirms that this is a reasonable approach. This follows the spirit of your direction, protects the Council’s interests and is the correct moral path for me personally.

A sensible suggestion that they seek a court ruling on whether it is legal, before implementing it.

So my advice is simple – adopting the Living Wage for the security contract is a step too far. There is compelling evidence that you would potentially fail to meet your fiduciary duty to ratepayers. There is a serious risk that you would be acting beyond your powers. You would be purchasing the service for 19% extra without any corresponding improvement in service levels or productivity. You could also set a precedent for other contracts which would cost the Council tens of millions annually. You would also be failing in your duty to me as a good employer. And you run the risk of tarnishing your reputation. Could a responsible public body really make a decision against clear legal and officer advice only to be directed by a Court to reverse its decision? There is also a very real risk that your enthusiasm for expanding the Living Wage could undermine the good progress achieved with our own workforce. Remember that the WCC Living Wage adopted for our own staff and CCO staff has not been tested in a court of law. A successful judicial review on the expansion of the Living Wage to contractors may encourage further challenges on its adoption for our own workforce. A defeat here would have very serious consequences as the decision has already been implemented.

So it isn’t just $2.4 million more for this one contract. It could lead to tens of millions of extra costs over all contracts.

Mayor and Councillors I stand before you reluctantly with a very serious and loud alarm bell. My advice is to take heed of it, be responsible and support the officer recommendation.

44 Report by Auditor-General on loss incurred by local authority

(1) For the purposes of this section and sections 45 and 46, a local authority is to be regarded as having incurred a loss to the extent that any of the following actions and omissions has occurred and the local authority has not been fully compensated for the action or omission concerned:

(a)money belonging to, or administrable by, a local authority has been unlawfully expended; or

(b)an asset has been unlawfully sold or otherwise disposed of by the local authority; or

(c)a liability has been unlawfully incurred by the local authority; or

(d)a local authority has intentionally or negligently failed to enforce the collection of money it is lawfully entitled to receive.

(2) If the Auditor-General is satisfied that a local authority has incurred a loss, the Auditor-General may make a report on the loss to the local authority, and may include in the report any recommendations in relation to the recovery of the loss or the prevention of further loss that the Auditor-General thinks fit.

(3) The Auditor-General must send copies of the report to the Minister and every member of the local authority.

46 Members of local authority liable for loss

(1)If the Auditor-General has made a report on a loss to a local authority under section 44, then, without limiting any other person’s liability for the loss, the loss is recoverable as a debt due to the Crown from each member of the local authority jointly and severally.

(2)If the members of the local authority or any other person or persons do not pay the amount of the loss to the Crown or the local authority within a reasonable time, the Crown may commence proceedings to recover the loss from any or all of those members.

(3)Any amount recovered by the Crown under subsection (2), less all costs incurred by the Crown in respect of the recovery, must be paid by the Crown to the local authority concerned.

(4)It is a defence to any proceedings under subsection (2) if the defendant proves that the act or failure to act resulting in the loss occurred—

(a)without the defendant’s knowledge; or

(b)with the defendant’s knowledge but against the defendant’s protest made at or before the time when the loss occurred; or

(c)contrary to the manner in which the defendant voted on the issue at a meeting of the local authority; or

(d)in circumstances where, although being a party to the act or failure to act, the defendant acted in good faith and in reliance on reports, statements, financial data, or other information prepared or supplied, or on professional or expert advice given, by any of the following persons:

(i)an employee of the local authority whom the defendant believed on reasonable grounds to be reliable and competent in relation to the matters concerned:

(ii)a professional adviser or expert in relation to matters that the defendant believed on reasonable grounds to be within the person’s professional or expert competence.

So the Councillors who voted against are okay. But the Councillors who voted for this policy could be in real trouble as they went against the advice of their chief executive and against legal advice so (i) and (ii) don’t apply. If a court finds this unlawful, I believe that there will be an attempt to seek the “loss” from individual councillors personally.

And having ignored their own Council’s legal advice, they can’t expect the Council to defend them in court. They’ll have to pay for their own lawyers, if the decision is found to be unlawful and they are pursued for the loss.

Comments (75)

Peter

ross411

I hope they get done for this. A precedent needs to be set, so that councilors like this in Wellington, and Auckland, realise that they are performing a service for the ratepayers, not forwarding their own agendas with no regard for the cost to those they are supposed to be representing.

CHFR

I would rather be painted by the media as mean and nasty than living with my head in the clouds.

I do find it interesting that Clr Peck can’t find the money for this in his cafe business but believes that security guards should be paid it. What does that tell you about how he views his staff but then again ratepayers money just grows on trees and his business has to actually earn it.

Heaven forbid I actually think Penny Bright might just have a point in withholding her rates when we elect such stupidity to council. Can anyone tell me what, aside from being a councelor for many years, Iona Pannett has actually done with her life??

I have always, and always will, been of the opinion that public officials and politicians should, barring specific circumstances such as Parliamentary privilege (which should be tightened), be liable for personal prosecution resulting from carrying out the duties of office. The public should be allowed to OIA and ferret around ALL interactions that public service individuals make (with sensible precautions around things like national security) – primary targets would obviously be the police, immigration and MBIE and all their associated ministers. Hopefully this case will be tested and Celia can be found guilty of complete lunacy and forced to cough up herself for it.

mikenmild

Perhaps a lawyer could comment, but I’m not at all sure that the Council’s decision to pay more for its security contract would be covered by the sub-sections of the Local Government Act that DPF has highlighted above.

dishy

They tried to justify the decision by simultaneously voting to make spending cuts elsewhere. By if those cuts could so conveniently made this week, why had they not already been made? And why aren’t the resulting savings spent properly, e.g. on drainage, libraries or playgrounds?

I’m also appalled at ‘mare’s simplistic, unscientific linking of income level to job satisfaction and tenure.

oldpark

Interesting that the know all guy from council the deputy mayor called JUSTIN LESTER, who owns a string of eating places,says he can’t afford to pay his staff the so called living wage. As far as he is concerned ,by his arrogant attitude to Wellington Ratepayers,they can eat cake,of course the same attitude is afforded to the Mayoral import from London, called Wade-Brown,no relation to the Auckland Mayor Len Brown,other that both Browns are power crazy, or elected bullies against ratepayers.

holysheet

It’s different when the left do it.

When will they learn that its not their money. That this money has to come from some where. Here its from the hard working ratepayers who have no say in how this money is spent.
How I wish the Nats would man up, grow some balls and repeal that wanker, Palmer’s, local govt act that allowed all the dross to vote in local body elections.
If you are not a ratepayer then you shouldn’t be bloody voting. Nothing is going to change until we get back to those who pay the money having the sole say on who spends it.

ross001

The CEO hasn’t thought this issue through. Any action taken by the WCC is potentially subject to judicial review. It’s like saying anything they do could be illegal.

Indeed there is a couple in Roseneath who are taking the council to court over a fence they have built that they have been ordered to take down. I suggest the CEO focus on this and similar cases rather than grandstand.

mikenmild

The idea that only ratepayers should vote seems to be a fairly persistent theme on Kiwiblog. We don’t seem to have similar calls that only taxpayers should vote in general election. In principle, I think the franchise should be as wide as possible. All citizens contribute in some way to their community and should have a say.

itstricky

The idea that only ratepayers should vote seems to be a fairly persistent theme on Kiwiblog. We don’t seem to have similar calls that only taxpayers should vote in general election. In principle, I think the franchise should be as wide as possible. All citizens contribute in some way to their community and should have a say.

Common meme here, of course, is the poor poor poor suffering ratepayer. Only they ever contribute anything of worth to the world.

Interesting legal battle. And even more interestingly it’s being focused on contractors, not permanent employees, as was possibly missed (or deliberately dropped) from commentary earlier. Just like I said, if you choose to pay your employees more to retain them and increase productivity with no drop in service or large change in rates costs, what business is that of The Chamber, or poor poor poor suffering ratepayers…

Albert_Ross

Do they have secret voting at Council? My guess would be that those who voted in favour were hoping to be defeated, so they could feel good about themselves and blame other Councillors for not having the courage to doing the right thing

Limiting the vote to property owners is 19th century thinking and quite ridiculous. And many people own their property through a trust or LAQC so it is not just renters who would be unable to vote.

Re the living wage, I am far from convinced it is legal even for council staff. They say they are doing it to promote productivity, but the figure they are saying maximises the tradeoff between productivity and salary cost just happens to be identical to the figure that left wing activist groups are promoting for completely different reasons. A court might be alert enough to see through that.

holysheet

jcuk (1,235 comments) says:
October 30th, 2015 at 8:03 am

at 7:55 am
The CEO has given the council excellent advice and some councilors have chosen to ignore it.
It is just advice and every view is questionable if it comes to a court where it will be decided if it is excellent or not..

As long as these lefties leaches pay for the legal bill associated with their piss poor decisions. Once again, you lefties don’t get it. It’s not your money you are spending.

itstricky

Than

I’m very wary of making politicians liable for the results of performing their duties, for similar reasons why I’m wary of creating a charge of corporate manslaughter. I’m not completely opposed to either, but the bar for liability needs be set high.

Policy choices and business decisions can have far reaching consequences. Councillors, MPs, and business owners shouldn’t have to live in perpetual fear of bankrupcy or criminal charges from something nobody could have forseen or for every action of those reporting to them. In both the politicial and business situations it should have to be solidly established that A) the consequence was a direct result of a decision, and B) the individual making the decision was aware of that, with the benefit of the doubt applying.

But in this case there is no doubt. The councillors have been very clearly told the legal advice the WCC received, they know there is a high risk of losing a judicial review, and they chose to proceed anyway. It would be quite appropriate for them to be found personally liable for any resulting cost.

Well they did vote to cut personnel and staff travel costs by $250k p/a to offset this. That’s only 2 or 3 mid level council staff jobs.
Clearly they have some unnecessary roles (probably more than 2 or 3).

I wonder what the flow on effects will be in the security industry and whether the company with the council contract will hire less staff to do the same work.
I expect a few security guards might be laid off as a result.

Nostalgia-NZ

Interesting to see who begins to bail out. This has the potential for the yes voters to have personal assets placed under threat. I imagine as the going gets a little tougher feelings of social justice will evaporate leaving the high minded more concerned about their own fat arses. CHFR makes the point about Penny Bright perhaps having a point about withholding paying rates until there is transparency around spending. Penny would probably support the ‘living wage’ if she were on the WCC but would most likely find herself the only one in the canoe when letters began arriving demanding payment for an unlawful decision and its consequences.

It’s mind boggling that a Council would say that public will get better services as the result of a living wage because one inference is that work effort is limited by current wages in a free labour market, another view could be that it was it is a Don Corleone style extortion ‘I need more money to keep the security guards awake, or else you might be sleeping with the fishes.’

thedavincimode

howitis

The CEO in a business generally gives advice to the Directors of a company at board meetings. The CEO is full time (plus) and has all the resources on tap such as legal and market research.
The councillors – or board- are part time and should listen. It is a two way dynamic.

Maybe these trendy lefties could learn a little Latin – like ‘ultra vires’

Wellington councillors sound like 17 year olds in a school council.
‘We’ll will use the bank of mum and dad to campaign for social justice’.
Remote from real world of responsibilities and cause & effect.
…..and these morons want us to pay for their pandas.

Its interesting… the council has contracted for services with a security company. Its done, signed, sealed and services being delivered under its terms. The company involve sets the pay rates with its workers.

Now a section of council have decided that an arbitrary “living wage” calculated by some activist is what a 3rd party, i.e. the security company, should be paying and have decided to demand the 3rd party pay said “living wage” and they will pay over the top of the amount agreed in the tender process and set down in the subsequent contract to achieve this “living wage”.

Very interesting. Not sure how that sits with council getting best value for ratepayers through its tendering and contracting process. On the face its a breach of their fiduciary responsibilities to achieve outcomes for the least cost.

And very interesting little campaign on here in the comments today to draw attention away from that fiduciary duty.

The “living wage” is a crock, imo, as pushed by Waldegrave and King We all know it – it bears no relationship to the requirements of the wage recipient to live. If it did it would be regional in nature to reflect the differences in costs between Westport and Auckland, not a blanket x dollars per hour. It wouldn’t say a single person should get the same as the imaginary couple with two kids the calculation is based on. It wouldn’t include luxuries like holidays away from home, access to the internet at home is a crock as well it can be accessed cheaply or free at libraries or via things like CBDfree..

Bottom line its just another everyone is equal, competition is bad, outcomes should be the same for everyone, don’t try and advance your own earnings via training or effort because the LEFT knows best and will GIVE you everything you need BS…

howitis

in 1985 The Mt Eden Borough council voted to be nuclear free.

The theory was that any Ruskie bombers flying over head would go and drop their nuclear payload on Takapuna or One Tree Hill once they saw the signs on roads leading into the Borough. (like the Fruit fly signs you see today)

This was all very naive but at least councillors had the excuse 30 years ago they were not paid.
These troughers are well paid and have had advice from their own legal and executive staff.

They still want to put social engineering ahead of roads, rubbish, and rose gardens.

SPC

This is the sort of legal risk threat that is used by corporations to block government policy they deem a risk to bottom line profit.

In this case, the regulatory framework was designed with the intent to ensure councils sought to deliver services efficiently in house, or by competitive tender.

Living wage policy has two sources:

1. in higher cost cities ensuring that MW work employees can afford to live in the city where their work is required.
2. a wage to ensure employment loyalty and to promote the employer as socially responsible.

(some private employers do it with conditions – only for longer term employees and or employees with dependents).

As for contractors – presumably the living wage requirement would only apply with contract renewal or a new contract.

The absolutely positive thing about it is that the workers will have more money to spend – good for local businesses (and Bill English).

Celia Wade-Brown is incompetent beyond belief. The Luddite will go at the next election.

Except the chances are she won’t. The same people who voted her in are the same people who support her green thinking.
It’s a sad reality that Wellington is infested with woolly headed greenies and labour luvvies who are all about seeming rather than doing.
The other reality is that we only had a 40% voter turnout, which indicates most of Wellington really doesn’t care that much.
And thirdly, it is likely that centre/centre-right candidates will split the vote and let Celia or someone similar back in.
Last election Celia got 27,171 votes, the next two candidates between them (John Morrison and Jack Yan) got 34,687.

cubit

The situation here seems similar to the debacle that was Environment Canterbury. If the action by the WCC is illegal then out they go. Perhaps the CEO might be a good choice as a Commissioner. Seems like a smart decisive man.

Mr_Blobby

The Government will do what it always does and pass enabling legislation to fix the problem.

Don’t get me wrong this is not right but it is what happens. There is no shortage of legislation to fix Council incompetence, and nobody was ever held personally liable.

Now to contracting.

Contracting was initially sold as a cost saving measure. A long term contract to supply a Guard could be lets say $19.70 per hour and the Guard is paid $14.5 per hour. Cheaper than Council could supply it themselves with their bloated cost recovery structures. In house would have been $30+++ per hour.

The problem is not just lifting the Guards pay to say $18 and hour and the contract rate to $25 per hour it is the add on extras that will be in the contract.

If you need additional Guards for a special event the casual rate would be $60 per hour and the Guard gets $14.5 per hour. Lift the Guard to $18 per hour and the casual rate could potential;y go to $72 per hour.

At that point you could argue for bringing the contracts back in house. It does not solve the problem of Councils monopoly system that allows them to recover costs and to simply pass the costs on without any cost/benefit analysis.

You know long service leave, regular pay increases, promotions, bonuses, overtime, before you know it there is a Security Manager and several assistant managers, empire building etc etc etc

Then some one will come up with the brilliant idea of contracting out services and saving money.

Dave Mann

This bullshit is symptomatic of a much wider malaise in NZ society.

I’m not a raving socialist by any means…. I would regard myself as right of centre in most things, but over the years as the unions have been emasculated, the government (and local governments) have taken it upon themselves to fill in the gap. This leads to the plethora of crazy OSH regulations, the Minimum Wage and all the other areas where strong Trades Unions used to be able to negotiate from positions of relative strength (i.e. numbers).

Obviously there were examples in the past of Unions’ excesses and these were often settled by a series of checks and balances…. but the present situation leaves absolutely no room at all for negotiation and deal-making as the fucking government assumes the power and passes laws and regulations which creates a fait accompli.

By what moral right does a local council have the ability to piss on its ratepayers’ interests like this?

Its really about time we started to reverse the tide against totalitarianism in NZ.

holysheet at 7:45 am ….If you are not a ratepayer then you shouldn’t be bloody voting…..

Really a quite stupid statement since every tenant pays their share of the rates through their rent.

DPF has a bee in his bonnet and it is really an amusing storm in a tea-cup like my link to the HERO buisiness.
===========================
Well of course you are wrong as usual.
The RTA forbids landlords from recovering their rates from a tenant. Go try bit and see what it costs you.
Go read the RTA.
Become a landlord yourself and see how it goes.
But you won’t. don’t have what it takes eh!

Stars And Stripes

This is a simple case of councillors getting involved in something which is not their mandate.
Like it or not wages and wage levels are something for central government to determine through legislation and not local government.
Social justice agendas are not councils business or mandate.

Than

The RTA forbids landlords from recovering their rates from a tenant. Go try bit and see what it costs you.
Go read the RTA.

They may not be able to change existing rental agreements each time rates go up or explicitly state that rates are the reason for a rent increase. But will you really claim with a straight face that the cost of rates (including their best guess as to increases during the term of the agreement) isn’t a factor landlords consider each time they set their rents? It’s a cost like any other, and it will be passed on. The fact that they can only do so each time the rental agreement is renewed doesn’t change that.

All residents of a town/city are ratepayers, directly or indirectly. All are users of council services. All should have the right to vote in local elections.

The shallow thinking of these councilors is unbelievable. Firstly to adopt a living wage figure that has no bearing on reality, no foundation in analysis, just plucked out of the air by a do-gooder in Lower-Hutt. And hey presto our woolly headed councilors, are falling over themselves to adopt on the ratepayers behalf.

If that wasn’t bad enough, now they are imposing it on a private company. How will that go down with their employees. All doing the same job, but if it’s council work you get paid more. And as to zero fiscal impact, what a smoke screen. Cutting expenditure to off set the increase in contract charges. What about the other council service companies – do you think their employees will want the same deal? What about the private companies using their services, will they have to pay more. How about the employees already on the so called living wage rate, achieved by hard work and up skilling, do you think they would want an increase – you bet.

The roll on effect will cost Wellington millions, as some other comment also indicate. The absolute selfishness of there councilors is mind blowing. And yes they will probably get back in, due to the high number of greenie socialists in Wellington. Well I hope they stay there and reap all the benefits as Wellington slowly dies. Trouble is they will be the first ones to leap of the sinking ship.

A judge on a six-figure pay packet is going to instruct a democratically elected body that they are breaking the law by voting to pay a livable wage to those whom they employ?
WCC CEO, also sitting on a six-figure pay packet ($400,000+pa), is worried that security staff might get less that a 10th of what he makes.
We live in two separate countries sharing one geographical location, the country inhabited by those on six-figure salaries bears very little resemblance to that inhabited by their subjects.

Agonised screams when some suggest those on six-figure salaries should take a trim and threats of legal action when democratically elected bodies attempt to top up the paltry pay-packets of those struggling at the bottom of the heap.

benaud

Stars And Stripes

Yoza- nobody is dying at the moment so by definition we are already being paid a living wage.
Just because some nobody lefty priest in Upper Hutt says differently does not make it a fact.
In reality though who gives a damn about those at the bottom of the heap because as long as I can still eat salmon on the BBQ and drink champagne I will not be give two cares.

Beware the Auditor. An external legal challenge is not required. The charging passage cited is similar to that applied to public servants I have seen operated. As an ex public servant it was something we were conscious of that we could be required to pay for wasteful expenditure.

The CEO is correct both in his advice and conduct. He would failing in his duty not to warn Councillors of the consequences of their actions and could possibly be joined as a party in their misconduct.

The issue that they made purported simultaneous cost savings is irrelevant. The council has a duty to make those savings if possible: setoff does not apply. Not making evident savings is also a breach of duty.

Ideology and blindsightnednes has exposed those councillors, voting for the actions contrary to advice and a clear law, to having to reimburse the City of Wellington for their unnecessary inflated expenditure.

The issue of the Zealandia default and failure to deal with that properly should also be addressed as that too may be caught by the same changing provisions.

It’s about time those we elected performed their duty according to law not ideology or a state of feel good.

Maggy Wassilieff

@KevOB

I agree that the Auditor General needs to investigate the Zealandia default with a fine tooth comb.
In my mind, it is a scam. The citizens of Wellington now own a building that they never wanted/requested. But they do not have any say in how that building is to be used… it is retained by Zealandia.
Under the guise of being a charitable trust, a select group of Wellingtonians have fleeced the ratepayers, built a grand monument for their own pleasure, and told the ratepayers to suck it up… because its a “win- win” for the City.http://www.visitzealandia.com/news-item/letter-to-the-editor-dominion-post/

The Council should never have made the loan to Zealandia. I understand they borrowed the whole sum of $10,000,000 at $6.5% costing $650,000 per year in interest alone! Zealandia’s plans at best were wishful thinking and I believe the council did not take adequate or proper advice before agreeing to such loan. It was obvious to the dummest financial klutz that Zealandia did not have a viable business proposition and they had several mis-starts in getting their project off the ground. No prudent person would lend on a business that flakey with paperwork only backed up by hope. Council may blame its officers but they take responsibility.

Time for Council to take the proper required action to collect the loan in full. Bankrupt Zealandia if necessary. The building may have some value if the site is sold for a small out of the way lodge. I don’t see much commercial value there.

It may be that Councillors will again be called to account by the Auditor for putting activism before their duty of care as Councillors. We cannot let such breaches go uncorrected without imperiling the whole of our desired impartial political governance.

In my view the Local Government Act charging provisions under Ss 44-46 are adequate to pull up the Council over Zealandia. There can never be general right in for those in public office or authority in control of tax or rate monies doing as they please with it. Ideology or personal interest follows after law and then after mandate.